December 2024

We break down industry trends, the data that supports them, and how they’ll impact what’s next. Because in retail, every item adds up to The Total.

Item No. 1: Retailers are finally optimistic. Growth is on the horizon in 2025.

Kevin Hart , Chief Sales Officer, Upside

After years in survival mode (pandemic + high inflation), retailers are shifting gears to expansion as economic pressures ease, according to Q3 2024 Upside survey data.

+ The data

• 61% rate their business health as exceptional —?up 14 points since Q1 2024.?
• Inflation concerns dropped to 32%, down 14 points since Q1 2024.
• Focus on digital strategy jumped to 31% (from 23% in Q3 2023), and footprint expansion climbed to 26% (from 19% in Q3 2023).?
• But: interest rate worries are creeping up —?23% now call it a top concern.

+ Why it matters: While optimism is up, interest rates could impact retailers' ability to finance expansions, potentially slowing growth plans next year.

= The Total: We can expect this trend to continue in surveys through H1 2025, especially as retailers begin to invest more in their digital strategies and footprint expansion.?

Item No. 2: Consumers aren’t buying it —?pessimism and cross-shopping dominate behavior

Dr. Thomas Weinandy , Senior Research Economist, Upside

Retailers may feel optimistic, but consumers tell a different story. Most remain cautious, and data around cross-shopping behavior shows that even optimists aren’t loyal.

+ The data:

• Only 22% of consumers feel the economy has improved since last year (optimists), while 56% feel that it has gotten worse (pessimists), per our Consumer Spend Report.?
• The optimists are 70% more likely to dine out daily or weekly, 49% more likely to order takeout or delivery, and 12% more likely to shop at a c-store —?while pessimists concentrate more of their spend at grocery stores.
• Both groups are cross-shopping across multiple stores and locations —?and optimists report shopping at even more stores than their pessimistic counterparts.?
• Cross-shopping has led to smaller grocery transactions and lower inflation-adjusted revenue for restaurants and c-stores.

+ Why it matters: Economic confidence may boost consumer spending, but it won’t reduce cross shopping. In fact, it might even increase as shoppers seek more options.

= The Total: Retailers, especially restaurants and c-stores, should prepare to capture increased spend as consumers gain confidence. But don’t expect loyalty to follow —?we expect cross-shopping to remain a headwind to revenue and transaction growth.

Item No. 3: Tracking fuel trends —?why we expect rack prices to drop over the winter months

David Poulnot , VP Fuel, Upside

Rack and sign prices fell nearly in sync in November, keeping margins stable, but holiday slowdowns and colder weather drove a decline in demand. We expect the same to occur through the winter months.

+ The data

• Rack prices fell nearly 11 cents per gallon month-over-month.
• Sign prices dropped just under 10 cents per gallon, with the Midwest and West seeing the largest declines (15-16 cents).
• Fuel and c-store transactions fell 5.6% in November.
• U.S. refineries ran hot, operating above 90% utilization.

+ Why it matters: Seasonal slowdowns mean less demand at the pump, but high refinery output could push rack prices even lower over the next several months.

= The Total: Fuel and c-store retailers must capture a larger share of available transactions to keep revenue steady as demand dips.

? Dig into more Fuel Trends by Upside.

Item No. 4: Holiday watch —?where to escape the kitchen and dine out on Christmas Day

Dr. Thomas Weinandy, Senior Research Economist, Upside

We’ve all heard it anecdotally —?Chinese restaurants are the place to be on Christmas Day. But what does the data say??

+ The data

• Who’s open? Dive bars (80%) and gastropubs (72%) are the most likely to stay open.
• Who’s busy? Transactions soar at Chinese (+120%) and Vietnamese (+106%) restaurants.
• Big spenders: Chinese restaurants also see an 81% jump in spending per transaction.

+ Why it matters: Staying open on holidays can be a big win —?or a bust —?depending on your category.?

= The Total: For some restaurants, like Chinese and Vietnamese spots, keeping the lights on pays off. For others, it might be better to close up shop and enjoy the eggnog. ??